When I was in school, our mascot (unfortunately) was called “The Green Wave”, so naturally when seeing an article announcing the “Green Wave” sweeping the nation last year, I was more inclined to think it was sports related and not cannabis. However, with my own state being one of the now 36 to have legalized medicinal cannabis, Going Green now means more than being environmentally conscious or school spirited.

Unlike many industries across the globe, cannabis experienced a record-breaking year in 2020, with consumption for both medical and recreational products on the rise. Meanwhile, one-third of U.S. adults now reside in states that permit the sale of adult-use cannabis, a number that is poised to grow in the coming years. According to a recent Gallup poll, nearly 70% of Americans are in favor of legalizing cannabis.

As demand for legalization continues to increase, and more than half of U.S. states having already legalized some form of medical or recreational marijuana, so too does the complexity surrounding the cannabis industry. With new entrepreneurs, investors, growers, dispensaries, employment opportunities and other marijuana-related business entering the market, the levels of risk also continue to grow, along with increasing sales. In an industry with sales over $21.3 billion in 2020 and projected sales expected to surpass $42 billion by 2024, there are equal amounts of uncertainty along with opportunity, especially for insurers.

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Being able to cater to and mitigate risks for a market, which is slated to generate more revenue than toothpaste, hard seltzer, and the NBA combined, will require digital dexterity. As Dave Chappelle said, “modern challenges, require modern solutions”, and with the recent passage of the Marijuana Opportunity Reinvestment and Expungement Act along with the reintroduction of both the Secure and Fair Enforcement (SAFE) Banking Act and the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, insurers must continue to prepare to cater to what could in turn become lucrative opportunities. In fact, according to a recent report from New Dawn Risk, US cannabis businesses could yield over $1 billion in annual premiums being insured on similar levels of other businesses.

Being able to provide the right type of coverages, pricing, and distribution maybe one of the reasons that right now, there are limited options being provided by the handful of insurers and managing general underwriters serving the market. From commercial property, product and/or employment practices liability, to workers compensation, or complex specialty lines, Insurers and insureds alike, are aware of the unique insurance challenges. As with any area of risk, though, these days, technology is often the catalyst for solutions, and the growing cannabis industry is no exception.

While much of the cannabis industry is still in its infancy and many producers have yet to establish best practices, there can be no denying that digital enablement will be an essential facet of the modern cannabis experience.

Legendary race car driver, Bobby Unser once said “Success is where preparation and opportunity meet.” So for insurers, preparation is not just about being able to provide a range of policy types, but also the ability to react, respond, and cater to an ever evolving industry, with cutting edge core technologies to cover cannabis from seed to sale and beyond. Going forward it seems that innovation will also be “going green”, with the added benefit of digital capabilities.

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Nikki Dugan

Nikki Dugan Nikki has had many monikers over the tenure of her career: Marketing Maven, Dedicated Brand-bassador, Catalyst for Culture and Champion for Change. She considers herself an eclectic mix of all; part Insurtech aficionado, part creative mind, part strategist, and part dreamer. When not focused on the latest challenges and technology solutions, she spends her time in her NJ home, experimenting in the kitchen and doting on her granddaughter.